Tuesday, 3 February 2015

Adani Power to bid for all six coal blocks reserved for the power sector: Sources

(Adani Power is in race for…)

Adani Power is in race for all six coal blocks reserved for the power sector in the upcoming auction of 23 operational mines, while Jindal Steel & Power is eyeing four, people with knowledge of the matter said.Hyderabad-based Madhucon Group's subsidiary, Simhapuri Energy, is expected to be a surprise bidder and may vie for all the coal blocks earmarked for the captive use of power producers.The Tokisud North block that earlier belonged to GVK Power is expected to attract the highest number of bids. More than a dozen companies including Adani Power, Essar Power, GMR Energy, Jindal Power, Lanco Infratech, Sesa Sterlite, Tata Power and West Bengal Power Development Corp are likely to submit bids for this block that lies in the South Karnapura coalfields in Jharkhand, a coal ministry official said.The block with 2.32 million tonnes of annual coal production capacity has rail connectivity within 2.5 kilometres.Gare Palma IV/2 and IV/3 in Chhattisgarh, previously owned by Jindal Steel & Power, is also being eyed by close to a dozen companies. Besides Adani and Simhapuri, they include GMR Energy, Jindal Power, Lanco Infratech, Reliance Power, DB Power, Sesa Sterlite and KSK Energy.The block has a capacity to produce 6.25 million tonnes a year, but the nearest rail head is about 55 km away.Some eight companies are expected to bid for the Amelia North block in Madhya Pradesh that earlier belonged to Madhya Pradesh State Mining Corp. The potential bidders include Essar Power, GVK Power, Jindal Power and Lanco Infratech.About half a dozen companies including Adani Power, DB Power, Jindal Power and Sesa Sterlite are said to be in race for Talabira-I in Odisha that was earlier owned by Hindalco. Sarisatolli and Trans Damodar in West Bengal are also expected to have attracted about half a dozen companies.Power firms have to bid lower than the price arrived after the technical stage. The last date for bid submission is February 3 while the price bidding starts February 14. The final price will be the cost of coal that the winner can pass on to electricity consumers.

Comment:

Coal block auction is the first step to improve the fuel supply issues in power sector. Many steel companies are also competing with the power companies to acquire the coal blocks.In my view the competition in South Karnapura coalfields (Jharkhand) will be worth watching.

Pros and Cons for coal block auction:

As per my view the advantage of inviting private sector in coal block auction is efficient use of coal blocks.At present Coal India is not working efficiently,so due to this fuel supply issues will get its solution.

The disadvantage is the increase in cost of coal.Suppose if Tata power will not be able to acquire any coal block,then Tata power have to buy coal from other private sectors at high price.

But there are many pros than cons in coal auction.So lets pray for best so that efficiency in the Indian power sector will improve.